Culture of performance

Transcription

GLOBAL ALTERNATIVE ASSE T MANAGEMENT
Culture of Performance
2 0 10 A nn u al R e p ort
The Carlyle group
1
Our culture of performance is driven by our relentless pursuit of generating superior
returns for our investors. It’s an environment in which exceptional performance is
rewarded, ideas are nurtured, collaboration is encouraged and innovation flourishes.
Our passion for innovation has produced a diversified group of global investment
vehicles backed by one of the most talented teams in the industry. The result:
a top-tier track record of performance across all economic cycles.
2 The Carlyle group
$6.4 billion
RETURNED TO INVESTORS
IN FIRST QUARTER 2011*
$7.5 billion
returned to our
investors in 2010*
$7.0 billion
deployed for new
investments in 2010*
$106.7 billion
assets under management as of 12/31/2010
$69.6 billion
equity invested and committed to
more than 900 corporate private
equity and real assets transactions
since inception*
$9.2 billion
GROSS PROCEEDS raised by portfolio
company IPOs in 2010 and First
Quarter 2011
*Figures are for our Corporate Private
Equity and Real Assets segments.
The Carlyle group
1
Innovation
drives us forward
1997:
Europe Buyout
U.S. Growth
U.S. Real Estate
For more than two decades,
we have developed our global
platform and invested in new
markets to offer a growing range
of options to meet the evolving
1990:
U.S. Buyout
2001:
Japan Buyout
needs of our investors.
1999:
Asia Buyout
U.S. Structured Credit
2000:
Global Energy & Power
Europe Growth
Asia Growth
We’re constantly working to
develop new ways to create
value for our investors.
2 The Carlyle group
2010:
Carlyle Energy Mezzanine
2010:
Acquired Stanfield Capital Partners CLOs
2006:
MENA Buyout
2004:
Mezzanine
Strategic Partners
2010:
U.S. Equity Opportunities
2008:
South America Buyout
2006:
Infrastructure
2010:
Carlyle Beijing Partners Fund
2002:
Europe Real Estate
2007:
Global Financial Services
2005:
Mexico Buyout
European Structured Credit
Asia Real Estate
2010:
Acquired Claren Road Asset Management
Sub-Saharan Africa
(Formed 2011)
AlpInvest Partners
(Announced January 2011)
The Carlyle group
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Diversification
creates opportunity
Our multi-fund, multi-industry, multi-geographic strategy enhances stability and flexibility.
We have one of the largest, most
diversified and scalable investment
platforms in the world. Our global
reach and breadth and our depth
of resources enable our investors to
seize opportunities in virtually any
economic environment.
4 The Carlyle group
19 countries
with 30 offices on six continents
84 funds
Our array of investment products across
three segments provides investors with a
range of asset allocation options.
1,350+ investors
from 75 countries
9 Corporate Private
Equity industries
We focus on industries that we know well and
deploy our expertise across the globe in an effort
Energy & Power 3.7%
Financial Services 2.1%
to improve the performance of our investments
Other 5.8%
and create value for our investors.
Aerospace &
Defense 6.4%
Tech & Business
Services 22.1%
Transportation 7.4%
Consumer &
Retail 18.4%
Telecom & Media 9.4%
Global Market
Strategies
19.4%
Healthcare 11.6%
Industrial
13.0%
CORPORATE PRIVATE EQUITY
AUM BY INDUSTRY
Corporate
Private Equity
52.6%
Real Assets
28.0%
As of 12/31/2010; sector allocation based on current equity invested
and excludes investments by our Real Assets energ y funds
AUM BY Segment
As of 12/31/2010
Europe, Middle
east & Africa
18.8%
Americas 52.0%
Asia-Pacific
29.2%
CORPORATE PRIVATE EQUITY
AUM BY GEOGRAPHY
As of 12/31/2010
The Carlyle group
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Experience
to invest wisely
Our strong track record of performance has earned us enduring confidence from our global investors.
Our deep expertise in multiple
industries has enabled us to make
solid investments, create value and
generate strong performance.
6 The Carlyle group
13 years
20 Senior Advisors
experience operating in China
each with an average of 40 years of experience
as of 12/31/2010
134 Managing Directors
with an average of more than 8 years of tenure at
Carlyle as of 12/31/2010
470+
24 years
investment professionals
experience in alternative
as of 12/31/2010
asset management
In the past five years alone,
capital committed to our
funds has increased by 286%.
120
100
80
60
40
20
0
1987
2010
24 years of growth
Total Capital Commitments Since Inception
Dollars in billions, excludes acquisitions
The Carlyle group
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Collaboration
defines our culture
Our One Carlyle collaborative approach
connects knowledge with opportunity
to create value for our investors.
8 The Carlyle group
One Carlyle is both our collaborative spirit
and the foundation of our culture. It’s a
strategy that drives our performance and
sets us apart.
50%
Nearly half of the equity invested or
committed in Corporate Private Equity
and Real Assets investments in 2010
benefited from cross-fund collaboration.
Working together across the globe,
Carlyle professionals share knowledge,
expertise and resources in an effort
to improve the performance of our
portfolio of investments.
The Carlyle group
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Daniel A. D’Aniello
Co-Founder and
Managing Director
David M. Rubenstein
Co-Founder and
Managing Director
William E. Conway, Jr.
Co-Founder and
Managing Director
10 The Carlyle group
letter from the Founders
For 24 years, Carlyle professionals have worked to invest wisely and create value for our
investors. This clarity of purpose guides all of our actions and is bolstered by our central
mission that further aligns our firm with the interests of our investors. Our mission is to:
• Generate superior investment returns
• Inspire the confidence and loyalty of our investors
• Attract, develop and retain highly talented professionals
• Demonstrate principled industry leadership
• Be responsible and respected members of the global community
Our mission is driven by our focus on serving our investors. Simply put, we work for our
investors—every day, in all ways—to produce consistent, strong returns. All other activities
flow from and support this primary objective.
This has always
We are constantly innovating to meet the needs of our investors. We developed our
multi-fund model to provide investors with a breadth of investment options. It’s a framework that has allowed our teams to remain specialized and localized, while benefiting
from being part of a larger organization with core services to support our fund teams.
As of December 31, 2010, investors representing 91% of total capital commitments have
invested in multiple funds, with 57% invested in more than five funds.
Carlyle is the only global alternative asset management firm that operates on six continents with investment professionals who, with few exceptions, are locals in the markets in
which they invest. We have worked hard to maintain our high standards of performance
and investment return objectives while creating new options for our investors.
been and will
always be our
core Purpose:
investing wisely
to create lasting
value for our
investors.
Our diversified product strategy provides our investment teams with the flexibility to
invest in companies and assets of varying sizes across diverse sectors. In particular, Carlyle
focuses on investing in small and medium-sized enterprises that provide the opportunity
to create value and generate better returns. To that end, our investment professionals
work closely with management in an effort to improve daily operations and identify new
growth opportunities.
Like other organizations that have sought to innovate for their clients, we have hit some
bumps along the way, and not every initiative has worked out as we initially planned. For
example, we launched an Eastern Europe-focused buyout operation and an Asian leveraged finance effort right before the Great Recession. However, we pulled back on those
initiatives when we realized the depth of the downturn was putting pressure on our investors to focus on preserving capital rather than making new commitments. In other cases,
we have chosen to return capital to investors where we did not believe we could effectively
invest it and meet our investors’ expectations.
Thankfully, most of our new fund initiatives have borne fruit for our investors. Indeed,
some of our first-time funds—including funds focused on Asia, Japan and distressed
opportunities—have been among some of the top-performing funds at Carlyle and of
their vintage. With good fortune, a commitment to investment excellence and a lot of
hard work, Carlyle has successfully pursued next-generation funds. We are fortunate
to have earned our investors’ confidence in, among others, five U.S. buyout funds, nine
Europe-based funds, 10 non-Japan Asia-focused funds, two Japan-focused funds and
48 funds in our Global Market Strategies business, which includes collateralized loan
obligation (CLO), mezzanine and distressed-oriented funds.
The Carlyle group
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Carlyle’s Operating Committee
comprises senior managing
directors who provide leadership
to serve our investors today and
into the future:
from left:
Gregory L. Summe
David M. Marchick
Jeffrey W. Ferguson
Glenn A. Youngkin, Chair
Michael J. Petrick
Adena T. Friedman
Bruce E. Rosenblum
Michael W. Arpey
We have worked hard
to maintain our high
standards of performance
and investment return
objectives while
creating new options
for our investors.
In January 2011, we announced plans to acquire a majority stake of AlpInvest Partners,
a global private equity fund-of-funds business. Including AlpInvest, Carlyle’s assets
under management are expected to reach approximately $150 billion in four distinct
business lines: Corporate Private Equity, Real Assets, Global Market Strategies and
Fund-of-Funds Solutions. We have established distinct due diligence, investment sourcing, operational capabilities and investment committee processes in each of these
business segments.
A significant goal for Carlyle in 2010 was to realize the value that was embedded in
our portfolio. Our investment teams did just that. We exited our ownership stake
in 32 investments across our Corporate Private Equity and Real Assets portfolios,
distributing some $7.5 billion to our investors in these segments in 2010, an amount
only exceeded by our distributions in 2007. Our momentum has continued in the first
quarter of 2011, during which we distributed in excess of $6 billion to our investors—a
Carlyle record for a single quarter.
In addition, we selectively accessed the public markets across our portfolio, successfully
completing 13 initial public offerings (IPOs) in Asia, Europe and the United States in 2010
and first quarter 2011. In some of these cases, we realized distributions or dividends; others served to reduce debt, positioning our investments to succeed in the future.
We also focused on deploying capital in an attractive investment environment. In total,
our Corporate Private Equity and Real Assets funds completed or announced 57 new
investments across 14 countries in 2010. These new investments represent more than
$7 billion in new equity investments, with an additional $3 billion committed to investments expected to close in early 2011. This figure far exceeds the $5.2 billion that we
invested in 2009—in investments that focused heavily on either distressed investment
opportunities or emerging markets.
Despite the ongoing challenges that pension funds and other traditional investors
are facing, Carlyle raised a total of $4.2 billion in fresh capital commitments in 2010
for six funds and multiple co-investment opportunities. The funds that had closings
included Carlyle Global Financial Services Partners, L.P. and Carlyle Asia Partners III,
L.P.; we also had several other funds with first or subsequent closings. We are pleased
that Carlyle continues to earn the confidence of its investors even during the most
turbulent times.
Just as Carlyle’s partners and professionals have done for two decades, we continue to
put our own after-tax money alongside that of our investors. Today, Carlyle partners
and other professionals and management teams have committed or invested more
than $4 billion of their own after-tax dollars alongside Carlyle’s funds.
We also worked to broaden the investment options available to our investors through
strategic investments and acquisitions. We acquired the management contracts on
more than $5 billion in CLOs, further solidifying Carlyle’s position in the structured
credit market. In December 2010, we acquired a majority stake in Claren Road
Asset Management, a long-short credit hedge fund manager. With the anticipated
acquisition of AlpInvest Partners, we expect to further expand our reach in the alternative asset industry.
Over the last year, we have taken steps to bolster our core management processes
and operations, again with the goal of enabling our investment professionals to focus
exclusively on pursuing and supporting good investments. In addition to strengthening
our accounting and investor relations processes, we have recruited new management
talent, improved investment advisory committee processes and strengthened the firm’s
Operating Committee. Carlyle will continue to build and invest in our accounting,
legal, regulatory and other investment services functions to enable our investment
teams to better serve our investors.
Because our investment decisions affect individuals, communities and the environment, we launched a number of initiatives focused on good corporate citizenship.
Our efforts begin with the application of the Guidelines for Responsible Investment
and continue with initiatives to elevate the importance of environmental, social and
governance considerations. While we are off to a good start, much work remains. We
are committed to building on the foundation we have established and thoroughly integrating environmental, social and governance considerations into the fabric of Carlyle.
To find out more, turn to pages 31 and 57 of this report or refer to our inaugural
Corporate Citizenship Report, published in January 2011 and available on our website.
We are grateful for the confidence our investors have shown in Carlyle, and we will
work to foster a culture that continues to reflect the low ego, collaborative, investorsfirst ethos that we try to embrace every day. We believe that Carlyle is well prepared
to serve our investors today and in the future in the same way we have for the past
24 years—through the creation of innovative and differentiated products established
with a focus on performance. This has always been and will always be our core purpose:
investing wisely to create lasting value for our investors.
William E. Conway, Jr.
Managing Director
Daniel A. D’Aniello
Managing Director
Senior advisors provide
wisdom and insight
Carlyle’s senior advisors provide
invaluable operational and management expertise to help improve the
performance of our investments. Their
extensive networks of industry contacts help portfolio companies recruit
key management, facilitate customer
introductions and forge business alliances. But, above all, these seasoned
professionals offer the wisdom and
strategic know-how that come from
years of working as CEOs, CFOs, COOs
and in other senior executive positions.
This knowledge enables them to source
deals, add expertise and provide leadership. It’s another way Carlyle works to
enhance performance.
David M. Rubenstein
Managing Director
The Carlyle group
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How is Carlyle different?
We have the broadest global
reach of any alternative asset
management firm.
Our investment philosophy has
enabled us to create a strong,
proven track record across
funds, industries, regions and
business segments.
We have the largest emerging
markets presence of any alternative asset management firm, with
offices in 10 emerging countries.
Our boutique sectoral, regional and
asset-specific funds allow us to combine the benefits of a large firm with
the specialization of a small firm.
Our collaborative culture downplays
ego and celebrates teamwork.
We have deep expertise in
nine core Corporate Private
Equity industries.
20 Senior Advisors with
extensive industry expertise.
We are staffed by a stable team of
senior-level investment professionals
across the globe.
Our investors benefit from our dedicated Investor Services professionals
and efficient financial reporting.
Carlyle partners and other professionals
have committed $4 billion of their own
capital alongside our investors.
Above all, we never forget that we
work for our investors.
The Carlyle group
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Our culture of
performance has
enabled us to
deliver a top-tier
track record across
all economic cycles
and build trust
with our investors.
section one Performance
At Carlyle, performance is woven into our culture. For more than 24 years,
we have worked to create value in every investment and deliver strong
returns for every investor.
Through constant innovation, deep experience and global collaboration, Carlyle has
grown from $5 million of capital in 1987 to $106.7 billion of assets under management
in 84 funds across 19 countries as of December 31, 2010.
Carlyle has performed well by pursuing a disciplined investment strategy and process.
We target a diversified range of investments in multiple geographic regions, seeking
out companies with leadership positions in their product areas, forming strategic
partnerships to access new opportunities, deploying our deep expertise in global
credit and creating value around the world. Together with our partners and other
professionals, we invest alongside our investors—further aligning our interests—
committing more than $4 billion of our own after-tax dollars to our funds.
Creating value and delivering strong performance
Our efforts to protect and enhance the value of our investments during the downturn
paid off. Carlyle investment professionals worked closely with portfolio company
management to help effectively allocate resources and implement strategies to improve
productivity. As a result, a number of our portfolio companies generated strong
growth and financial performance, creating opportunities to exit investments that we
believe had achieved significant value.
In 2010, Carlyle sold its ownership stake in 32 investments across our Corporate
Private Equity and Real Assets portfolios. Notable among these were:
• Britax Childcare, a Carlyle Europe Partners II, L.P. portfolio company, sold to
Nordic Capital.
• Compusearch, a Carlyle Venture Partners II, L.P. portfolio company, sold to JMI
Equity and Arlington Capital Partners.
• Frontier Drilling, co-invested by three Carlyle/Riverstone Global Energy and Power
funds, sold to Noble Corporation.
• HCR ManorCare, a Carlyle Partners V, L.P. portfolio company, sold its real estate
assets to HCP, a real estate investment trust.
• kbro Limited, a Carlyle Asia Partners II, L.P. portfolio company, sold to the Tsai family.
The Carlyle group
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Improving performance in the healthcare sector
MultiPlan is the nation’s largest healthcare preferred provider organization and the industry’s
most comprehensive supplier of independent, network-based cost management solutions. It has
more than half a million healthcare providers under contract, an estimated 40 million consumers
accessing its network products and processes some 70 million claims each year. After four years of
ownership, Carlyle sold MultiPlan in 2010 in one of the largest private equity exits of the year in a
transaction that valued the company at $3.1 billion.
MultiPlan grew aggressively under our guidance and encouragement. For example, the company
organically grew its fee negotiation business and acquired two companies during our period of
ownership. These acquisitions, coupled with management’s growth initiatives, enabled MultiPlan to
expand its network, broaden its claims capture and deepen its discounts. The outcome: significant
growth in both revenue and EBITDA.
The deal is an example of how our industry expertise can help improve a company’s performance
and add value to an investment.
$3.1 Billion
After four years of ownership, Carlyle sold
MultiPlan in 2010 in one of the largest private
equity exits of the year in a transaction that
valued the company at $3.1 billion.
Stephen H. Wise
Managing Director
Global Healthcare Team
Karen H. Bechtel
Managing Director and
Head of the Global
Healthcare Team
section
section one
one Performance
Performance
“Carlyle’s ability to think strategically
about the healthcare industry, along
with their ideas about how MultiPlan
could capitalize on opportunities, gave
the company new avenues for growth.”
Mark Tabak
Chief Executive Officer
MultiPlan
The Carlyle group
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Adding value by improving performance
In 2006, Carlyle Asia Partners II, L.P. acquired kbro Limited
(then known as Eastern Multimedia Company) for $1.3 billion.
The transaction was one of the largest buyouts ever in Asia.
kbro is Taiwan’s largest cable television operator by revenue
and has 1.2 million subscribers. Last year, Carlyle successfully completed a partial exit and recapitalization of kbro in
a sale to the Tsai family, a controlling shareholder of Taiwan
Mobile. During our ownership, the company centralized
operations to reduce costs, completed an add-on acquisition
that bolstered its scale, and grew high-speed broadband and
other value-added services. In fact, kbro was the first company to launch digital television services in Taiwan.
Alex S. Ying
Managing Director
Asia Buyout Team
Gregory M. Zeluck
Managing Director
and Co-Head of the
Asia Buyout Team
• MultiPlan, a Carlyle Partners IV, L.P. portfolio company, sold to BC Partners
and Silver Lake.
• Otor, a Carlyle Europe Partners III, L.P. portfolio company, sold to DS Smith.
• philosophy, Inc., a Carlyle Partners IV, L.P. portfolio company, sold to Coty, Inc.
• Vought Aircraft Industries, a Carlyle Partners III, L.P. portfolio company, sold to
Triumph Group.
• Wall Street Institute, a Carlyle Venture Partners II, L.P. portfolio company, sold to
Pearson Education.
• Yangzhou Chengde Steel Tube Co., a Carlyle Asia Partners II, L.P. portfolio company,
sold to Precision Cast Parts.
In the first quarter of 2011, we continued our strong pace of activity, distributing to
our investors more than $6 billion—setting a record for the largest amount distributed
by Carlyle in a single quarter.
Seeking high-performance opportunities
In 2010, our teams of investment professionals and industry experts worked together
across the globe to identify potential investments, focusing on sectors that we believe
are misunderstood, have compelling and unrealized embedded value, and are positioned for success in an uncertain environment.
Our teams identified opportunities in a number of consumer-driven businesses, as we
believe demand will increase with an improving global economy. Leveraging our global
resources, Carlyle made investments in a wide range of geographic regions, including
three emerging markets—Brazil, China and the Middle East.
Notable new investments include:
• In Brazil, Carlyle made a significant investment in Scalina, the country’s largest
manufacturer and retailer of women’s hosiery and lingerie.
• In China, Carlyle made investments in ATMU, the country’s largest independent
deployer of automated teller machines, and China Fishery Group, a global industrial
fishing company. Carlyle also invested in C.P. Pokphand Co., a developer and provider of quality animal feed products for farm operators across the country.
• In Europe, Carlyle acquired B&B Hotels, a budget hotel chain, and a portfolio of six
highly specialized multi-channel retail businesses from Primondo Specialty Group.
• In Saudi Arabia, Carlyle acquired a 30% stake in General Lighting Company, a lighting fixture manufacturer and supplier.
• In the United States, Carlyle acquired NBTY, a global manufacturer and marketer
of nutritional supplements. Carlyle also entered into an agreement to acquire Park
Water Company, a California-based water utility company.
$5.45 billion
Booz Allen Hamilton revenue for
the 12 months ended 12/31/2010
Combining innovation and strong performance
Booz Allen Hamilton is a provider of management and technology consulting services to the U.S. government in the defense, intelligence and civil
markets. In 2008, the company separated its U.S. government and global
commercial businesses, and Carlyle bought a majority stake in the U.S.
government business.
Now able to focus primarily on its core government sector, Booz Allen has
seen double-digit revenue growth and a significant rise in earnings. As of
the last 12 months ended December 31, 2010, revenue was $5.45 billion, up
10.6%, adjusted EBITDA increased 20.9% and total backlog, at $11 billion,
was 21.4% above the prior-year period. The results demonstrate continued
strong demand for Booz Allen’s services and its long-standing ability to
win new work and recompetes in a highly competitive marketplace.
Peter J. Clare
Managing Director
and Co-Head of the
U.S. Buyout Team
In November 2010, Carlyle assisted Booz Allen in launching a successful IPO on the New York Stock Exchange, raising more than $270 million
(before expenses), with shares closing 14.7% above their offering price on
the first day of trading.
The Carlyle group
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Initial Public Offerings unlock Value
Carlyle’s ability to bring 13 portfolio companies public and raise $9.2 billion amid a recovering economy stands out as an excellent example of how we create value for our investors.
Successful IPOs require specialized industry and market knowledge, and are the result of
precise timing and execution. Having operations in 19 countries provides Carlyle with local
insight into public markets across the globe. And with our global network of industry and
capital markets expertise, we have the resources to apply our collective experience and
wisdom to every IPO we oversee to help ensure the offering’s best possible performance.
$9.2 billion
IPO gross proceeds in 2010 and first quarter 2011
The Carlyle group
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We apply creative thinking
and innovation to develop
new methods to create
value for our investors.
Fresh approaches to
investing help expand
opportunities and generate
stronger performance.
section TWO innovation
Carlyle’s global footprint, combined with innovative investment strategies, provides
important advantages in the marketplace. It opens doors to developing new relationships and strengthens existing partnerships. It helps us engage with governmental
and non-governmental organizations, sovereign wealth funds and other stakeholders
around the world. We believe it also enables us to take different approaches, stray
from the status quo to develop new initiatives, enter new markets and look at every
transaction from every angle.
Expanding our investment reach
At Carlyle, we have a history of developing new initiatives to offer a wider range of
options for our investors. Within 10 years of the launch of our first fund in 1990 to
pursue buyout opportunities in the United States, we had expanded our buyout operations to Asia and Europe and added funds focused on U.S. real estate, global energy
and power, structured credit, and venture and growth capital opportunities in Asia,
Europe and the United States.
Over the last 10 years, our drive to innovate gained momentum as we developed an
increasing number of new, diverse products, including funds focused on distressed
opportunities, infrastructure, global financial services, mezzanine investments, and real
estate across Asia and Europe. We also launched new operations in fast-growing emerging markets, including in the Middle East and North Africa (MENA) and South America.
In 2010, we continued to apply innovative strategies to expand our business to access
greater opportunities to create value for our investors. Our new initiatives include:
Claren Road Long-Short Credit. In 2010, Carlyle acquired a 55% stake in Claren
Road Asset Management, which has $4.7 billion of assets under management as of
December 31, 2010. We believe Claren Road’s expertise in long-short credit enhances
the One Carlyle platform.
Energy Mezzanine. We formed a new team to focus on mezzanine debt investments in
the energy and power space, primarily in the United States and Canada. With more
than $1 trillion in forecasted capital needs each year in the United States, we believe
robust demand for energy capital is creating significant opportunities for debt investing.
The Carlyle group
25
Fund of Funds. We expect to add Fund-of-Funds Solutions to our platform of products
with the anticipated acquisition of AlpInvest Partners, a private equity asset manager
with more than $43 billion of assets under management. The addition of the fund-offunds platform will provide our investors with a wider range of investment choices and
will significantly expand the scope of Carlyle’s global asset management operations.
RMB Beijing Fund. To further strengthen our position in China and expand our investment capabilities in this high-growth country, we established a renminbi (RMB)denominated fund to invest in larger growth companies in Beijing and across China.
The fund was established through a partnership between Carlyle Asia Partners and
Beijing Municipal Bureau of Financial Work.
Structured Credit. We significantly expanded our structured credit operation with the
acquisition of two CLO portfolios in 2010. The acquisitions include more than $4 billion
of CLO and other credit assets from Stanfield Capital Partners and more than $1 billion
of CLOs from Mizuho Alternative Investments. The acquisitions establish Carlyle as one
of the world’s largest structured credit managers.
U.S. Equity Opportunities. We formed a new team to focus on smaller, middle-market
buyout investments in North America. The U.S. Equity Opportunities team will target
transactions ranging in size from $20 million to $150 million of equity across Carlyle’s
nine core Corporate Private Equity industries.
Carlyle Energy Mezzanine:
Tapping into growing demand for new energy
$1 trillion
Projected energy capital needs
each year in the United States
In 2010, we formed a new team to invest in mezzanine debt in energy and power projects,
primarily in the United States and Canada. We believe increasing global demand for
energy and power is creating attractive dynamics for mezzanine investing. Many companies are under pressure to expand and upgrade their aging energy-generation fleet and
develop new forms of renewable and unconventional energy generation. At the same
time, traditional banks have cut back on lending, hindering access to capital. As a result,
mezzanine debt is becoming a significant source of capital to finance many energy and
power projects.
The Carlyle Energy Mezzanine Opportunities team includes former Morgan Stanley project and structured finance professionals who have a long history working together and
who have spent their careers focused on investing in and financing energy projects. We
believe this new team’s combination of industry, asset and related structuring expertise
and broad, non-traditional deal-sourcing network provides Carlyle with a significant
competitive advantage in the multibillion-dollar energy market.
Strategic partnerships enhance access to opportunities
Innovation requires combining our skills with those of other, compatible partners.
Strategic partnerships enhance our ability to access a larger and deeper range of
opportunities, and boost our competitive position in a particular industry or geographic market.
Carlyle Infrastructure Partners. Our Infrastructure team seeks to provide alternative
solutions to meet the demands of funding public and private infrastructure projects
and assets, primarily in the United States and Canada, where deferred maintenance
and new construction are creating significant investment opportunities. One such
example is Carlyle’s public-private partnership with the State of Connecticut to
redevelop, operate and maintain the state’s highway service areas. Service Employees
International Union members have been hired to perform janitorial and ground maintenance services.
RMBS Funds. Carlyle’s U.S. real estate operation has been investing in residential
mortgage-backed securities (RMBS) with joint venture partner Falcon Bridge Capital
since 2007. Falcon Bridge is a specialty finance company focused on acquiring and
managing a diversified portfolio composed of residential real estate securities, residential mortgage loans and related instruments.
Carlyle Infrastructure Partners,
L.P. entered into a 35-year publicprivate partnership with the State of
Connecticut to redevelop, operate
and maintain the state’s 23 highway
services areas.
The Carlyle group
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In China, a focus on the middle class
Part of our investment strategy is seeking trends that create opportunities and investing early
to create value. In China, the country’s rapidly growing middle class is creating increasing
demand for higher quality food and a greater selection of protein products. As a result, three
investments recently completed by Carlyle Asia Partners III, L.P. focus on companies in China’s
agriculture and food industries, as we recognized and seized what we saw as substantial opportunities. We believe these three companies have the potential to help modernize China’s
food industry and create a more efficient food supply, giving more options to the country’s
burgeoning middle class.
100 million
Estimated number of households expected
to be added to China’s middle class by 2020
China Fishery Group. In July 2010, Carlyle invested $155 million to reinforce China
Fishery’s position as a reliable and responsible supplier of sustainable fish products
to the global market and animal protein supply chain. China Fishery is a well-run
company with an established track record and well-earned position in the global
fishing industry. In addition to partnering with the company’s management to grow
its businesses, we are working to further advance China Fishery’s corporate social
responsibility commitments, particularly to set higher standards in sustainable
practices for the industry.
C.P. POKPHAND CO. LTD
C.P. Pokphand Co. In July 2010, Carlyle made a $178 million investment in C.P.
Pokphand Co., one of China’s largest livestock and aqua feed producers. Growing
animal protein consumption and more stringent food safety standards in China are
increasing demand for high-quality animal feed products from responsible, experienced producers such as C.P. Pokphand. Carlyle’s experience in the food industry
value chain brings valuable insight to the company as it continues to focus on producing high-quality products and becoming a leading supplier to China’s livestock
farming industry.
Guangdong Yashili Group. In 2009, Carlyle acquired a 17.3% stake in Yashili, one
of China’s largest infant formula companies. In July 2010, Carlyle acquired an
additional 11.9% interest in the company, and then in November 2010, Yashili successfully completed an IPO, which diluted Carlyle’s ownership stake to 24.4%. Also
last year, we helped the company recruit a chief quality officer to supervise product
quality control and supply chain protocols. We assisted Yashili in establishing a Food
Quality and Safety Advisory Committee charged with introducing international best
practices and providing strategic guidance to the board of directors. The advisory
committee is the first of its kind in the Chinese dairy industry and represents a significant step forward in Yashili’s mission to build a world-class quality control system,
improve the brand’s competitiveness and expand internationally.
The Carlyle group
29
Maritime Ventures. To capitalize on increasing demand in the shipping sector, Carlyle
formed a new joint venture in March 2011 to acquire more than $5 billion in container,
dry bulk, tanker and other shipping vessels. Maritime Ventures combines Carlyle’s
extensive transportation experience and established operations in Asia with the shipping expertise of our partners. It’s a creative solution that focuses on bringing together
Chinese shipbuilders, lenders and state-owned companies to support China’s desire to
increase the amount of cargo it controls. Carlyle formed Maritime Ventures with Tiger
Group Investments in partnership with Seaspan Corporation, the Washington Family,
Gerry Wang and Graham Porter.
South America. In March 2011, Carlyle and Credicorp, a Peruvian financial institution,
formed a strategic joint venture to target growth capital and buyout opportunities primarily in Peruvian companies. Credicorp is Peru’s largest financial group and has more
than $17.5 billion of assets under management.
In 2010, Carlyle formed a strategic alliance with Banco do Brasil, one of Latin America’s
largest financial institutions with more than $500 billion in total assets. We believe this
strategic relationship with a strong, local partner enhances our ability to source and
execute transactions in the fast-growing emerging market of Brazil.
Innovating to improve corporate citizenship
We realize that our investment decisions affect many people, communities and the
Innovation is a powerful
environment. As a result, in 2010 we launched a number of programs and initiatives to
differentiator. At
build on our commitment to corporate citizenship.
Carlyle, we are always
Guidelines for Responsible Investment. We developed our Guidelines for Responsible
looking for ways to
Investment in 2008. In addition to integrating the guidelines into our investment
set ourselves—and our
process, last year we intensified our focus on sharing the guidelines with a targeted set
investments—apart.
of our portfolio companies, and began educating them specifically about the environmental, social and governance issues related to their operations. In 2011, we plan to
implement a more systematic process for promoting the guidelines across our portfolio, including encouraging Carlyle’s portfolio companies to consider the guidelines at
board meetings.
EcoValuScreen. Working with Environmental Defense Fund (EDF), we developed a new
due diligence tool called EcoValuScreen, which identifies opportunities for operational
improvements at prospective portfolio companies that enhance both environmental and
financial performance. We also partnered with EDF to support several initiatives with
our existing portfolio companies, including Allison Transmission and Hertz.
Innovation is a powerful differentiator. At Carlyle, we are always looking for ways to set
ourselves—and our investments—apart.
Corporate Citizenship Report
In January 2011, Carlyle became the first global alternative
asset manager to produce a corporate citizenship report. The
report highlights our efforts to invest wisely and responsibly by
promoting social and environmental sustainability and strong
corporate governance practices. The report describes how we
are implementing our Guidelines for Responsible Investment
and includes specific case studies illustrating how we are sharing the guidelines with portfolio companies. We invite you to
learn more by visiting our website: www.carlyle.com.
The Carlyle group
31
Our constant drive to
innovate has increased
the diversification of
our investment platform,
enabling us to provide
our investors with an
ever-expanding array
of investment options.
section Three diversification
Our focus on innovation has enabled Carlyle to expand and offer one of the largest and
most diverse families of funds in the world, providing a broad spectrum of asset allocation choices for our investors.
Over nearly 25 years, Carlyle has grown from a private equity firm with a single investment product focused on a single country to a global alternative asset management
firm with 84 funds across three segments. Today, our global reach includes 30 offices
that extend across 19 countries on six continents.
Our global, diversified platform—which provides stability and flexibility—is intended
to enhance our ability to deliver strong performance across all economic cycles. Our
global platform also provides greater access to opportunities across a wide range of
industries and geographies. This diversity is reflected in our investors themselves:
Carlyle works on behalf of more than 1,350 investors in 75 countries.
Corporate Private Equity
A Broad, Diversified Platform. Carlyle’s Corporate Private Equity platform offers a
diversified array of global buyout and growth capital investment products. Our leadership in Corporate Private Equity, Carlyle’s largest and oldest operation, provides a
strong foundation for continued growth and innovation. Our Corporate Private Equity
teams advise 27 funds across 18 countries.
Since inception, Corporate Private Equity has invested more than $41 billion in equity
in over 400 portfolio companies and distributed proceeds of more than $35 billion to
investors around the world. Our Corporate Private Equity teams seek a wide variety
of investments, targeting high- to modest-growth firms to market-leading, large-cap
companies. They work collaboratively with both company management and other
Carlyle colleagues to find ways to improve the companies’ operational performance
and market position to maximize value for our investors.
Buyout Products. Carlyle’s buyout portfolio is the core of our Corporate Private Equity
operation. It has expanded substantially over the years and includes 17 funds with
$52.2 billion of total assets under management. Fifteen are geographically focused on
a diversified range of investment opportunities in the Americas, Asia, Europe, Japan
and the MENA region, and one is focused on the global financial services industry.
The Carlyle group
33
Carlyle’s Global Alternative Asset Management Platform
We are one of the world’s largest and most diversified alternative asset management firms. We manage 84 distinct
funds that invest across three segments, nine core Corporate Private Equity industries and six continents. Our
global size, scale and brand enable us to access opportunities in virtually every market around the word.
Corporate
Private Equity
BUYOUT
• Carlyle’s largest and
oldest operation
• Most diversified global buyout
operation in the industry with
25 offices globally
GROWTH CAPITAL and
equity opportunities
• Invests in multiple stages
of growth and development
• Global presence with offices in
Asia, Europe and North America
Global Market
Strategies
• Invests in structured
credit (CLOs), distressed assets
and mezzanine debt
• Claren Road Asset
Management long-short credit
• Global reach with offices
in Hong Kong, London,
Los Angeles, New York and
Washington, DC
Real Assets
Fund-of-Funds Solutions*
• Invests in real estate, energy
and infrastructure strategies
• T he anticipated acquisition
of AlpInvest Partners will
provide a variety of fund-offunds investment options
• Real estate investments include
offices, hotels, retail, for-sale
residential, senior living and
multifamily residential properties
• Opportunistic approach
• E xtensive local market
knowledge and deep industry
expertise
• Fund Investments
• Secondaries
• Co-Investments
*We plan to establish our Fund-of-Funds
Solutions business at the time we complete
our investment in AlpInvest Partners.
We continually seek to expand and diversify our buyout portfolio into what we view as
key areas for the future. In 2010, we formed a new team to target opportunities in middle-market private equity in North America across Carlyle’s nine core Corporate Private
Equity industries. In early 2011, we formed a team to focus on the emerging market of
Sub-Saharan Africa and established a joint venture to pursue investments in Peru.
Focusing on the theme of a rebound in business and technology services spending, our U.S. buyout fund, Carlyle Partners V, L.P., made strategic acquisitions in
two U.S.-based global telecommunications companies, CommScope and Syniverse
Technologies. CommScope was acquired with our Europe buyout fund, Carlyle Europe
Partners III, L.P., for $3.8 billion, and the Syniverse transaction was valued at a total of
$2.6 billion. Both transactions were completed in January 2011.
In Europe, Carlyle made four new buyout investments in 2010 and one company
completed an IPO. New investments included a majority interest in Giannoni France, a
manufacturer of stainless steel heat exchangers for condensing boilers.
Recognizing the global demand for quality healthcare and a rising need for health services in the emerging markets, our Asia and U.S. buyout funds, Carlyle Asia Partners III,
L.P. and Carlyle Partners V, L.P., teamed up to acquire Healthscope, Australia’s secondlargest hospital provider.
In Japan, Carlyle successfully exited its investment in Kito Corporation, a manufacturer
of hoists and overhead cranes. Carlyle acquired Kito in 2003 and, since then, helped
the company restructure, expand and complete an IPO on the Tokyo Stock Exchange.
In the MENA region, in addition to our investment in General Lighting Company, we
oversaw the rapid growth and strong performance of another Carlyle investment:
Medical Park Sağlık Hizmetleri, Turkey’s second-largest healthcare services company.
Under Carlyle’s guidance, Medical Park is executing a well-structured growth strategy.
In South America, Carlyle made two investments, including the acquisition of a controlling stake in Grupo Qualicorp, a provider of brokerage, consultancy services and
management of private health insurance plans in Brazil.
Growth Capital Products. Carlyle’s Growth Capital portfolio includes 10 funds with
$3.9 billion of assets under management as of December 31, 2010. The funds are
advised by three regionally focused teams in Asia, Europe and the United States.
27 funds
Number of funds across
Carlyle’s Corporate Private
Equity portfolio
Carlyle’s U.S.-focused growth capital operation targets lower middle-market companies with unrealized growth potential, with an emphasis on small buyout and expansion-stage growth equity transactions involving U.S. companies with global potential.
In 2010, Carlyle U.S. Growth Fund III, L.P. teamed up with Riverstone/Carlyle Global
Energy and Power Fund IV, L.P. to make a significant capital investment in Quorum
Business Solutions, a provider of business and information technology solutions for the
oil, gas and renewable energy industry.
Carlyle Europe Technology Partners pursues growth capital and small- to mid-cap
buyout investments in companies characterized by technological innovation and leadership in sectors with positive dynamics. In 2010, Carlyle acquired a majority interest
in Companeo, Europe’s largest online company focused on generating business-tobusiness leads. In addition, Carlyle sold FRSGlobal, a risk and regulatory compliance
software vendor to financial institutions, having expanded the company globally and
doubled its revenues.
Investing in the global financial industry
In 2010, Carlyle Global Financial Services Partners was particularly active seizing opportunities stemming from the lingering effects of the global financial crisis.
Carlyle invested or committed more than $480 million of equity in seven transactions spanning a wide variety of sectors in the broader financial services community.
Investments closed in 2010 included Bank of N.T. Butterfield & Son, the largest independent Bermuda-based depository institution; Hampton Roads Bankshares, a bank
holding company headquartered in Atlanta; and OzForex Group, an online foreign
exchange payments platform.
The team also assisted portfolio company BankUnited in an IPO on the New York
Stock Exchange in January 2011, which raised approximately $900 million. Carlyle
Global Financial Services Partners, L.P. had a final closing in 2010 with $1.1 billion
in commitments.
P. Olivier Sarkozy
Head of Carlyle Global
Financial Services Partners
The Carlyle group
35
Carlyle Asia Growth Partners is focused on private high-growth companies with strong
local management teams and established market positions in China, India and South
Korea. In 2010, Carlyle Asia Growth Partners IV, L.P. made five investments totaling
more than $164 million in equity, illustrating the fund’s continued strong investment
activity across Asia. In addition, Nantong Rainbow Heavy Industries completed an
IPO, raising approximately $210 million.
39 funds
Number of funds managed by
Global Market Strategies
Global Market Strategies
An Expanding Array of Options. Carlyle’s Global Market Strategies platform comprises
an array of structured credit, mezzanine, distressed and hedge fund options. As of
December 31, 2010, Global Market Strategies includes 39 funds with $20.6 billion of
assets under management. In 2010, we significantly enhanced the scale and diversity
of our Global Market Strategies offerings by expanding our business. We also formed
a new team to target mezzanine debt opportunities in the energy and power space in
North America.
Structured Credit (CLO). Our structured credit group invests primarily in performing
senior secured bank loans through CLOs and other structures. The group manages
32 funds in Europe and the United States, accounting for approximately $13 billion
in assets under management.
Corporate Mezzanine. Carlyle Mezzanine Partners invests in debt and equity securities of leveraged buyouts, recapitalizations and growth financings. In 2010, Carlyle
Mezzanine Partners II, L.P. made two investments to facilitate acquisitions: one in
Altegrity, an information and security services company for governmental and commercial customers, and the other in INC Research, a provider of outsourced clinical
trial services to pharmaceutical and biotechnology companies.
Carlyle Strategic Partners. Carlyle Strategic Partners invests in the debt and equity
of operationally sound, financially distressed companies in Carlyle’s core industries
around the world.
“Scale is critical to the CLO
business. The purchase of
the Stanfield and Mizuho
CLO contracts establishes
Carlyle as one of the
world’s largest structured
credit managers.”
Linda Pace
Managing Director
and Head of U.S.
Structured Credit
Growing our Global Market Strategies platform
We greatly expanded our Global Market Strategies platform in 2010. We added more than $5 billion in CLOs to our credit
portfolio with the acquisition of the Stanfield and Mizuho CLO management contracts, making Carlyle a leader in the
structured credit market. Our investment of a majority stake in Claren Road Asset Management, a long‐short corporate
credit hedge fund manager, extends our reach and better positions Carlyle’s investors to exploit opportunities in credit
over the long term.
Given the dislocations that have taken place over the last 24 months and the various political, economic and regulatory
forces currently reshaping the financial services and investment business, we believe that this is an opportune time to
expand our presence within the Global Market Strategies space. We plan to capitalize on these opportunities within our
three main business lines—structured credit (CLOs), corporate mezzanine and distressed opportunities—as well as other
business lines we plan to launch or acquire.
We employ a deep value investment strategy with tremendous flexibility throughout our portfolio to invest anywhere in
the capital structure. Our hybrid strategy—debt or equity, minority or majority, public or private—provides the capability to evaluate a company’s capital structure from all angles and focus on the specific area where we can seek the greatest
return combined with downside protection.
Combining that flexibility with a seasoned team and Carlyle’s broad industry and geographic expertise creates an environment for top performance.
G lobal M ar k et S trategies
GMS
“This new partnership is an important
addition to our expanding stable of
credit product offerings. Claren Road’s
long-short approach to investing in the
credit markets globally is consistent with
Carlyle’s views on the optimal strategy
to exploit investment opportunities in
credit over the long term.”
Michael J. Petrick
Managing Director
and Head of Global
Market Strategies
The Carlyle group
37
Real Assets
Diverse Expertise. Carlyle’s Real Assets platform leverages the deep expertise of our
diverse teams of industry experts. It includes 18 funds with $29.9 billion of assets under
management. The funds focus on a variety of real estate, energy and power, renewable
power and infrastructure strategies.
Real Estate Products. Since we launched our first real estate fund in 1997, Carlyle has
invested in more than 450 properties around the world with a total capitalization of
$40 billion, completed over 200 full or partial realizations, and returned $5.9 billion to
18 funds
investors. Today we offer 11 real estate funds focused on investment opportunities in
Number of funds in Carlyle’s
Real Assets portfolio
estate transactions.
Asia, Europe and North America. In 2010, Carlyle invested $1.4 billion in 12 new real
In the United States, Carlyle’s most recent U.S. real estate fund, Carlyle Realty Partners
V, L.P., made slightly more than half of its real estate investments in off-cycle sectors.
These investments include RMBS, distressed residential, rental apartments, data centers and senior living properties. We believe off-cycle sectors allow for greater diversification and a reduction of risk within the fund, and offer investment opportunities that
are capable of generating current cash flow returns to equity.
In Europe, Carlyle invested in seven real estate transactions in 2010, including five in
the United Kingdom, one in the Netherlands and in the acquisition of a majority stake
in a multi‐country budget hotel chain that was acquired with our Europe buyout fund,
Carlyle Europe Partners III, L.P. Acquisitions in the United Kingdom included a portfolio
of six landmark properties attractively located in central London, a property in central
London that is part of a planned student housing redevelopment and a prime residential
site approved for redevelopment in the heart of Chelsea and Kensington. The property
The data explosion generates opportunities across markets
The demand for data storage, data processing and network connectivity is big—and getting
bigger. According to a recent study, 62% of data center managers plan to expand hardware
capacity at existing data centers by the end of 2011. CoreSite Realty Corporation is poised to
take advantage of this growth. CoreSite owns, develops and operates strategically located
data centers designed to meet the stringent needs of the information technology community.
The company offers more than two million square feet of wholesale data center space and
colocation services to more than 600 customers across the United States.
In 2010, Carlyle helped guide CoreSite through an IPO on the New York Stock Exchange and
structure the company as a real estate investment trust. Concurrently with the IPO, which
raised $311 million, four Carlyle U.S. real estate funds contributed a total of 11 data centers
to CoreSite in exchange for a 63% stake in the company. CoreSite (formerly CRG West) has
been operating Carlyle Realty Partners’ data center investments since 2001. Carlyle Partners
II, L.P. also participated in the investment.
in the Netherlands is an addition to a portfolio of student housing developments in the
Benelux countries. Carlyle Europe Real Estate Partners also exited three investments: two
in France and one in the United Kingdom.
In Asia, the markets in general continued to be challenging in 2010. Japan continues to
experience a lack of domestic liquidity arising from the global financial crisis. In China,
valuations are at significantly high levels due to excessive liquidity. Despite the challenging environment, Carlyle was able to secure one investment in China, a joint venture
for-sale residential development project in Huzhou, and exit one investment in Japan, a
mixed-use development project in Hiroshima. Also in 2010, Carlyle developed a strategic partnership with the Korean National Pension Service in advising and managing their
acquisition of a $652 million Class A office property located in Sydney, Australia. As a
result of our patience and discipline, we believe we are well positioned with our transaction pipeline, particularly in China, to make more attractive investments in 2011.
Energy and Power Products. Carlyle teamed up with Riverstone in 2000 to pursue investments in the energy and power industry. Since then, Carlyle/Riverstone has established
six global energy, power and renewable energy funds with aggregate equity commitments
totaling $17 billion.
In February 2011, Kinder Morgan, one of the largest energy transportation, storage and
distribution companies in North America, completed one of the largest private equitybacked IPOs in U.S. history. Shares sold in the public offering, which raised approximately $3.3 billion, were sold by a group of existing Kinder Morgan investors, including
Carlyle and Riverstone. In 2010, Riverstone/Carlyle Global Energy and Power Fund IV,
L.P. had an active year, completing 11 new investments.
$311 million
Robert G. Stuckey
Managing Director
and Head of the U.S.
Real Estate Team
Amount raised in the CoreSite IPO
The Carlyle group
39
Riverstone/Carlyle Renewable and Alternative Energy Fund II, L.P. completed three investments in 2010. The investments included Seajacks International, an owner and operator of
self-propelled jack-up vessels used to facilitate the installation and maintenance of offshore
wind turbines in the North Sea, and Enviva, a biomass energy company that sustainably
sources energy-rich wood residues and transforms them into renewable fuels.
Infrastructure Products. Carlyle Infrastructure Partners, L.P. invests in public and
private infrastructure projects and assets primarily in the United States and Canada. In
2010, Carlyle acquired a majority stake in Illinois Central School Bus, the sixth-largest
school bus owner and operator in North America. In December 2010, Carlyle entered
into an agreement to acquire Park Water Company, an owner and operator of two
regulated water distribution utilities in California and one in Montana. The transaction
is subject to regulatory approval.
$43 billion
AlpInvest’s total assets under
management as of 12/31/2010
Fund-of-Funds Solutions
Providing Investors with New Options. In January 2011, Carlyle announced plans to acquire
AlpInvest Partners, a private equity manager with more than $43 billion of assets under
management. The acquisition will add a leading fund-of-funds and secondary platform,
significantly expanding our global asset management business and providing our investors
with a wider range of investment choices. This new investment platform will also enable
our investors to construct unique portfolios through customized managed accounts.
With offices in Amsterdam, Hong Kong, London and New York, AlpInvest invests globally in a broad, diversified range of private equity. The company has dedicated teams
focused on three separate investment operations:
Fund Investments. Between 2000 and 2010, AlpInvest made 389 fund investments
managed by 226 different general partners. As of December 31, 2010, the Fund
Investments team had committed a total of €28.9 billion. The team pursues investments across the full spectrum of the private equity market, building portfolios reflecting clients’ unique needs.
Secondary Investments. This operation partners with private equity investors to provide innovative liquidity and restructuring solutions. The Secondary Investments team
acquires or restructures portfolios of private equity assets ranging in size from €1 million to more than €1 billion.
Co-investments. The Co-investments team targets investments alongside leading private equity sponsors in leveraged buyouts, growth capital and mezzanine transactions
throughout Asia, Europe and North America. The team pursues investments in a wide
range of businesses from small local niche players to large global companies.
The new joint venture will ensure AlpInvest’s operational and investment independence.
AlpInvest will retain complete discretion over all investment decisions, which will be
made by an investment committee consisting solely of AlpInvest investment professionals. AlpInvest will also maintain an information firewall with Carlyle to provide
safeguards for general partner, fund or deal-specific information.
Fund-of-Funds Solutions: innovating and
expanding to meet our investors’ needs
At Carlyle, we have always worked to innovate to meet investors’ evolving needs.
With the anticipated acquisition of AlpInvest Partners, we expect to further
expand the scope of our global alternative asset management business and create
new opportunities for Carlyle investors who seek a leading fund-of-funds and secondary platform. Through customized managed accounts, AlpInvest constructs
unique portfolios based on an investor’s specific needs. AlpInvest’s Amsterdam
headquarters is also expected to expand our presence in Europe.
AlpInvest is one of the world’s largest investors in private equity, managing
more than $43 billion through a global private equity fund-of-funds program
and related direct investment activity in addition to their secondary and mezzanine operation.
Partnering with sophisticated global investors is one more way Carlyle is providing the range of products and services our investors seek.
The Carlyle group
41
Uncovering value in diverse emerging markets
The world’s emerging markets offer tremendous opportunities to create long-term value. Driven largely by rising consumer demand
from a growing middle class, economic expansion in these markets continues to accelerate.
In China, we continued our strong pace of investment activity, completing three new transactions in 2010, including an investment in
ATMU, the country’s largest independent automated teller machine operator and service provider. We have a strong leadership position in China with 89 professionals in five offices dedicated to investing in the country.
In South America, Carlyle has made three investments in three Brazilian companies since 2009. One of our most recent was a significant
investment in Scalina, Brazil’s largest manufacturer and retailer of woman’s hosiery and lingerie with approximately 10% market share.
Our MENA office continues to assess and execute attractive deals. In 2010, Carlyle made its first investment in Saudi Arabia with the
acquisition of a 30% stake in General Lighting Company, the country’s largest lighting fixture manufacturer and supplier.
Marlon Chigwende
Managing Director and Co-Head
of the Sub-Saharan Africa Team
Johannesburg
Firas Nasir
Managing Director
MENA Buyout Team
Dubai
Growth of Carlyle’s
Investments in
Emerging Markets*
($ in billions, as of 12/31/2010)
$15
Fernando Borges
Head of the Carlyle South
America Buyout Team
São Paulo
$6
Equity
Invested
total
Value
*Valuation subject to change
Janine Feng
Managing Director
Asia Buyout Team
Hong Kong
Carlyle has been investing in emerging
markets since 1998, when we were among
the first alternative asset management firms
to establish a presence in China. Since then,
Carlyle has invested a total of more than
$6 billion of equity in emerging markets,
which has more than doubled in value,
growing to a total of over $15 billion as of
December 31, 2010. We believe our strategy
of establishing local operations staffed by
local, experienced investment professionals
puts us in a strong position to identify opportunities in emerging markets and create value
for our investors. This strategy, combined
with our global resources, has enabled Carlyle
to complete more than 100 investments
across a diversified range of emerging markets, including China, India, emerging Asia,
the MENA region and Latin America.
The Carlyle group
43
Carlyle investors benefit from
our deep and extensive experience.
This experience allows us to deliver
leadership and knowledge to
create value for our investors.
section four Experience
Navigating complex transactions within widely varied industries and in countries across
the globe takes more than skill. It takes experience. At Carlyle, our experience runs deep.
We have managed a multi-faceted global organization for nearly 25 years. During
this time, we have gained invaluable experience from investing across a broad array of
asset classes. This experience has enabled us to establish an attractive track record
of performance, committing over $69 billion of equity to more than 900 Corporate
Private Equity and Real Asset investments.
We have a strong, stable team of more than 470 investment professionals. Many of our
senior managing directors who head our fund operations have been with Carlyle for
nearly 10 years, some for nearly 20.
Our network of 20 senior advisors further deepens our experience and expertise.
Comprising former CEOs, CFOs and other senior executives, Carlyle’s team of senior
advisors shares strategies to help enhance investment performance and offers invaluable insight into industry trends and potential opportunities.
The deep experience of our teams of professionals has resulted in a track record of
performance and enduring confidence from our global investors. That’s why we have
been able to innovate and launch new initiatives and next-generation funds and enter
new markets. For example, our core U.S. buyout operation has grown from a single
fund launched more than 20 years ago to five U.S. buyout funds. Today, we have seven
buyout groups on six continents. Likewise, our U.S. real estate operation has grown
from one fund launched in 1997 to six U.S. real estate funds, in addition to three in
Europe and two in Asia. We believe our depth of experience, multiple fund vintages and
presence across the globe position us well to capitalize on opportunities and trends
that yield attractive returns for our investors.
The Carlyle group
45
Expanding our range and depth of our expertise
We gain experience in new and emerging investment areas by recruiting strong teams
with track records of their own. For example, our Global Market Strategies operations are headed by Michael J. Petrick, who is also a member of Carlyle’s Operating
Committee. Mr. Petrick joins Carlyle after a 20-year career at Morgan Stanley, where he
was Managing Director and Global Head of Institutional Sales and Trading.
Likewise, our new Energy Mezzanine team—launched in 2010 to focus on energy mezzanine debt investments to tap into increasing global demand for energy and power—is
led by Managing Director David W. Albert and Principal Rahul Culas. Prior to joining
Carlyle, Messrs. Albert and Culas worked together at Morgan Stanley, along with Mr.
Petrick. Mr. Albert was a Managing Director and Global Head of Morgan Stanley’s
Project and Structured Finance Group, and Mr. Culas was an Executive Director.
In South America, our buyout team is led by Fernando Borges, who previously participated in 12 investments in the region as a Managing Director at AIG Capital Partners
and CEO of AIG Capital Investments do Brasil.
In 2010, we established a new U.S. Equity Opportunities team to target opportunities
in middle-market private equity across Carlyle’s nine core Corporate Private Equity
industries. The team is led by Rodney S. Cohen, who comes to Carlyle from Pegasus
Capital Advisors, a middle-market investment firm, where he was a Co-Managing
Partner. Mr. Cohen will partner with Carlyle Managing Director Brooke B. Coburn, a
15-year Carlyle veteran.
Leveraging our experience to acquire a portfolio of
landmark properties in London
In Europe, our core real estate team has worked together for 15 years. In 2010, this experience paid off when the group made a major new addition to its portfolio by acquiring the
White Tower portfolio of properties for a total of £671 million. The portfolio comprises six
landmark, income-producing office properties totaling in excess of 155,000 square meters
that generate more than £62 million in rent each year. The properties are well located in the
center of the City of London and along the riverside south of the River Thames, an area that
has seen major redevelopment in recent years.
46
Robert Hodges
Managing Director
Carlyle Europe Real
The Carlyle group Estate Partners
This acquisition provides a rare opportunity to make a significant investment in the London
office market and to benefit from the projected strong rental growth in the city. It’s also an
excellent example of our strategy of making long-term investments in landmark assets in
strategically important European centers. While each property benefits from an existing
secure income profile, there are also considerable longer-term opportunities for active
asset management and redevelopment, where we believe we can apply our real estate experience to add significant value.
Building upon OUR DEEP EXPERIENCE TO EXPAND, DIVERSIFY, INNOVATE
For nearly 25 years, our deep experience in 11 core industries has produced a track record of performance and resulted in enduring
confidence from our global investors. Our focus on industries that we know well has enabled us to expand from our core U.S. operations and diversify and innovate into a broader range of funds, investment disciplines and geographies—creating one of the world’s
largest and most diversified alternative asset management firms with 84 funds across three segments.
Real Estate
459 investments
Tech & Business Services
145 investments
Telecom & Media
55 investments
Consumer & Retail
36 investments
Industrial
39 investments
Aerospace & Defense
29 investments
Transportation
18 investments
Energy & Power
74 investments
Healthcare
38 investments
Financial Services
12 investments
Infrastructure
4 investments
A focus on 11 core industries provides a strong foundation for growth
(Corporate Private Equity and Real Assets Investments since 1987)
Putting our experience to work
to add value to Vought Aircraft
Our considerable experience in the aerospace and
defense sector has enabled Carlyle to invest some
$3.5 billion of equity in 29 Corporate Private Equity
transactions in the sector since 1987. We put our
experience to work with Vought Aircraft Industries,
overseeing the acquisition of the Aerostructures
Corp. in 2003, instituting a new management team,
streamlining operations and then selling Vought’s new
world-class facility for 787 production to Boeing.
Adam J. Palmer
Head of the Global Aerospace
and Defense Team
During our period of ownership, Vought was the largest independent developer and producer of structural
assemblies for commercial, military and business
aircraft. Last year, Carlyle sold Vought to aircraft
components maker Triumph Group in a transaction
worth $1.44 billion.
The Carlyle group
47
Leadership now and into the future
At Carlyle, we have a strong, stable team of senior managing directors who lead our core fund operations. Our leadership includes veteran investment professionals, many of whom have been with Carlyle for more than 11 years. Allan M.
Holt and Peter J. Clare, Co-Heads of the U.S. Buyout team, have been with Carlyle since the early 1990s. We also recruit
world-class talent who are leaders in their field to expand the scope of Carlyle’s capabilities. Each of our senior managing directors has deep expertise in their specialized investment discipline and extensive experience managing a complex,
global organization. Their depth of leadership combines experience and innovation with wisdom and ingenuity, creating
a strong foundation for performance today and into the future.
Brooke B. Coburn is
Head of U.S. Growth
and Deputy Head of U.S.
Equity Opportunities. He
is located in Washington,
DC, and has 17 years
of experience in
the industry.
Allan M. Holt is Managing
Director and Co-Head of
the U.S. Buyout team. He
is located in Washington,
DC, and has 18 years of
experience in the industry.
Xiang-Dong (X.D.) Yang
is Managing Director and
Co-Head of the Asia Buyout
team. He is located in Hong
Kong and has 16 years of
experience in the industry.
470+
Number of Carlyle investment
professionals operating out
of 30 offices in 19 countries
Eric E. Sasson is Managing
Director and Head of Carlyle
Europe Real Estate Partners.
Marco De Benedetti is
He is located in Paris and
has 21 years of experience
Co-Head of the Europe
in the industry.
Buyout team. He is
located in Milan and has
five years of experience
in the industry.
Sandra J. Horbach is
Head of the Global
Consumer and Retail
team. She is located in
New York and has 24
years of experience in
the industry.
Gregor P. Böhm is
Co-Head of the Europe
Buyout team. He is
located in London and
has 14 years of experience
in the industry.
The Carlyle group
49
We encourage a high degree
of collaboration throughout
the firm. Combining the
wisdom and knowledge of
our investment professionals
across the world enhances
performance.
section FIVE Collaboration
One Carlyle collaboration is the foundation of our culture of performance. It’s a
proven strategy that differentiates us in the market. It defines our brand and drives
our performance. And it fosters the development of better ways to create value and
serve our investors.
Our One Carlyle collaborative approach is at work every day. More than 470 investment professionals in 19 countries work together seamlessly and selflessly, sharing
insights about local markets and industries with others across the firm. Our professionals create a global network of specialized knowledge that enhances our ability to
improve the performance of our diversified portfolio of investments across the globe.
This collaborative approach creates a global vision with local insight. The result: a
broader view of potential investment opportunities and a deeper level of expertise.
The benefits of collaboration
We believe our collaborative approach can create significant competitive advantages.
It enhances our ability to analyze investments, deploy capital and improve the performance of our portfolio companies. It also fosters the development of intellectual
capital and risk management.
Our global network of advisors, industry experts and CEOs provides strategic and
operational support to help drive the performance of our portfolio companies to the
next level. Our professionals work together to facilitate customer introductions and
business alliances. They also help portfolio companies identify opportunities that promote growth, including strategic acquisitions and expansions. Here are some examples
of the One Carlyle collaborative approach at work:
Allison Transmission. In China, Allison Transmission has a strong position in the market. Our U.S. buyout operation collaborates with Carlyle teams in China to help Allison
deepen its penetration in the country, making the most of China’s burgeoning economy
and need for better public transportation.
In 2007, Carlyle Partners IV, L.P. and Onex Corporation acquired Allison Transmission
JIM WATSON/AFP/Getty Images
from the General Motors Corporation. Headquartered in Indianapolis, Allison
designs, manufactures and markets automatic transmissions and hybrid propulsion
systems for on-highway trucks and buses, off-highway vehicles and equipment, and
U.S. President Obama visiting Allison Transmission
on May 6, 2011.
The Carlyle group
51
The value of collaboration
Collaboration between our South America Buyout and Healthcare teams made all the
difference in Carlyle’s acquisition of a controlling stake in Grupo Qualicorp. Our geographical reach and experience with healthcare companies such as HCR ManorCare
and MultiPlan were important factors when Qualicorp decided to sell a controlling
stake to Carlyle. Qualicorp is a full-service provider of health benefits management
services in Brazil with three million clients. Carlyle will work with the company to help
it move to the next level of efficiency in providing high-quality services and bolster its
ability to make acquisitions.
Our Healthcare and South America Buyout teams are co-managing the investment.
Working together, the teams plan to add value by enhancing Qualicorp’s corporate
governance, redesigning internal controls and procedures, adding board members
with experience implementing growth strategies, strengthening management capabilities, and positioning the company for add-on acquisitions, among other steps.
We are pleased to partner with the Qualicorp management team as we build upon
the company’s excellent growth and service track record. The company is ideally
positioned to help provide the country’s growing middle class with high-quality,
low-cost healthcare at a time when rising disposable income is driving an increase in
healthcare spending.
Fernando Borges
Managing Director and Head
of the Carlyle South America
Buyout Team
Fernando Pinto
Principal
Carlyle South America
Buyout Team
3 million
Number of Grupo Qualicorp clients
A number of South American countries
are experiencing strong, stable economic
growth. For example, in 2010 GDP in
Brazil and Peru surpassed the 7% mark.
Carlyle’s South America Buyout team,
based in São Paulo, is well positioned
to source and execute transactions in
this largely underpenetrated region.
Managing Director Fernando Borges,
who heads up our South America team,
Managing Director Juan Carlos Felix and
Principal Fernando Pinto have extensive
investment experience in Latin America.
Their experience in the region was
instrumental in the completion of two
investments in 2010: Grupo Qualicorp
and Scalina, Brazil’s largest hosiery and
lingerie company. In March 2011, in an
effort led by Juan Carlos Felix, Carlyle
formed a joint venture with Credicorp,
Peru’s largest financial group, to target
opportunities in that country.
The Carlyle group
53
Deep industry experience applied globally in a seamless,
selfless way—that’s the heart of One Carlyle.
As healthcare needs rise around the world, our Global Healthcare team, led by Managing Directors
Karen H. Bechtel and Stephen P. Wise, has been in increasing demand among Carlyle colleagues. In
2010, Karen and Steve were honored with the One Carlyle award for leading transactions and supporting portfolio companies on five continents.
Karen and Steve brought their wealth of healthcare industry expertise to create value in a number
of investments, including Healthscope in Australia, Qualicorp in Brazil and Qualicaps in Japan.
They supported other Carlyle teams across the globe in every way they could—through analysis, due
diligence and troubleshooting—putting the interests of the firm ahead of their own. At the same
time, their focus on improving the performance of the MultiPlan and HCR ManorCare investments
produced attractive results for investors of Carlyle Partners IV, L.P. and Carlyle Partners V, L.P.
One Carlyle is a tangible differentiator for our firm, and Karen and Steve’s work is representative of
this spirit of collaboration that flows throughout Carlyle.
military vehicles worldwide. The company’s hybrid system is in operation in some
3,500 buses and coaches in more than 160 cities across the globe. Allison estimates
that its hybrid system has contributed to an overall fuel saving of more than 65 million liters of fuel to date and a corresponding reduction of approximately 170,000
One Carlyle
One Carlyle is the foundation of our strategy and embodies our core values and our
approach to accessing global markets.
In 2010, we strengthened this approach
by rewarding collaboration across funds,
enhancing our brand marketing strategy
and expanding our corporate citizenship activities. Approximately half of the
equity that we invested or committed in
Corporate Private Equity and Real Assets
in 2010 went to One Carlyle transactions—
those drawing resources from two or
more Carlyle funds. We plan to continue
to dedicate significant resources to this
cross-firm collaboration to ensure that
One Carlyle remains a key differentiator
for our firm in the global marketplace.
metric tons of carbon dioxide.
With more than 15,000 Allison-equipped buses now operating in China, the company
is leveraging its top position in the commercial-duty automatic transmission industry
in China to introduce hybrid buses to cities throughout the country. In addition,
Allison completed a new manufacturing facility in India and production began in 2010,
which is expected to further bolster the company’s performance across Asia and, in
particular, in China.
Healthscope. In 2010, Carlyle’s Asia and U.S. Buyout teams collaborated to acquire
Healthscope, Australia’s second-largest hospital provider. Both teams agree that the
One Carlyle global platform was instrumental in bringing the transaction together. The
U.S. Buyout team provided the healthcare industry expertise, while the Asia Buyout
team brought an intimate knowledge of the company and the Asian and Australian markets. The result: the acquisition of a high-quality company in a strong, growing market.
NBTY. In one of the largest private equity transactions in 2010, Carlyle Partners V,
L.P. and Carlyle Europe Partners III, L.P. teamed up to acquire NBTY, Inc., a vertically
integrated manufacturer and retailer of high-quality vitamins and nutritional supplements in the United States with operations worldwide. The company sells more than
25,000 SKUs under a portfolio of 50 owned and licensed brands—including Nature’s
Bounty, Pure Protein and MET-Rx—which hold leading positions across their respective
categories, channels and geographies.
The transaction is an excellent example of how the One Carlyle global platform works for both
our investors and our portfolio companies. During the due diligence process, Carlyle’s U.S.
Consumer and Retail team collaborated with several other teams across the globe, including
the Government Affairs team in Washington, DC, which assisted with regulatory issues, and
Carlyle’s Asia Buyout and Growth Capital teams in China, which helped evaluate opportunities to enhance NBTY’s low-cost position in the nutritional supplements industry through
various sourcing opportunities in Asia.
Given NBTY’s significant retail presence in Europe, principally through the Holland & Barrett
banner in the United Kingdom, the U.S. Consumer and Retail team also reached out to
Carlyle’s Europe Buyout team for its on-the-ground expertise. In conjunction with this collaboration, Carlyle Europe Partners III, L.P. also made a sizable equity commitment to the
transaction. We believe the collective experience of Carlyle’s U.S. and Europe Buyout teams
in their respective markets, coupled with the proactive efforts of Carlyle’s Asia Buyout and
Growth Capital teams, will help drive profitable growth for NBTY and enhance the value of
this investment.
€480 million
B&B’s enterprise value
at acquisition
Working together, working green
Our acquisition of the B&B Hotel Group in 2010 combines the
experience of Carlyle’s real estate and buyout teams and B&B’s
excellent management team. Our shared goal: grow the chain,
valued at €480 million at acquisition and comprising 223 budget
hotels with a total of 16,162 rooms, across France, Germany
and Italy. We plan to accelerate the pace of new hotel openings
across Europe and expand into new territories such as Poland,
Portugal and the Netherlands.
The transaction represents collaboration between
Carlyle Europe Partners III, L.P. and Carlyle Europe
Real Estate Partners III, L.P. The investment team
was particularly impressed by B&B’s commitment
to meeting and exceeding environmental, social and
governance standards set by industry regulatory bodies,
including participation in the Green Key Eco-Rating
Program. Carlyle is committed to fully supporting
the company as it continues to focus on ESG issues.
Franck Falézan
Managing Director
Europe Buyout Team
Eric E. Sasson
Head of Carlyle Europe
Real Estate Partners
The Carlyle group
55
We are keenly aware
of our responsibility to
consider the impact of
our investment decisions
on people, communities
and the environment.
section Six Corporate Responsibility
We believe that being a good corporate citizen is part of good business practice
and creates long-term value for our investors. That’s why we recently released our
first-ever Corporate Citizenship Report. It describes our efforts to incorporate
environmental, social and governance (ESG) considerations into our investment
practices and into our own daily operations.
In recent years, we have sharpened our focus on ESG issues associated with our
investments and our firm. While we’re off to a good start, there is much work to
do. We are committed to building on the foundation we have established and are
thoroughly integrating ESG considerations into the fabric of Carlyle.
Our 2010 Corporate Citizenship Report provides an overview of our corporate
citizenship activities and highlights several efforts underway at our portfolio companies. Among other initiatives, the report describes:
•Carlyle’s development and integration of the Responsible Investment Guidelines
Corporate Citizenship
in our investment decision-making processes for controlling corporate buyout
One Planet
One Community
transactions, including specific case studies, and our efforts to begin sharing the
guidelines environmental
with a targeted stewardship
set of portfolio companies.
community volunteering
•Our partnership with Environmental Defense Fund and our collaborative effort to
develop EcoValuScreen, a due diligence tool that identifies operational changes at
prospective portfolio companies in an effort to improve both environmental and
financial performance.
•Our support for specific environmental initiatives at several portfolio companies,
including Allison Transmission, Connecticut Service Plazas and Hertz Corporation.
•Carlyle’s global One Community program, which promotes volunteerism in the
communities in which we operate, and our efforts to promote diversity across
the firm.
The Carlyle group
57
To strengthen our ties to the communities where we live and work,
Carlyle developed the One Community and Wealth Sharing programs.
Our One Community volunteer and Wealth Sharing programs are rooted in the
One Carlyle philosophy of working together to create positive change. One Community
provides Carlyle employees with the opportunity to use their talents to volunteer in
communities in which they live, work and invest. Our Wealth Sharing Program supports
Carlyle employees in their charitable giving by matching on a dollar-for-dollar basis up to
$2,000 per year for contributions made to educational and humanitarian organizations.
One Resource
wealth sharing
One Community
community volunteering
One World
Corporate
Governance
One Community is a flexible, locally focused initiative. All Carlyle employees are given
two working days per calendar year to volunteer. We support a range of volunteer proworkplace
grams in diverse
geographicdiversity
and cultural contexts. Employees are encouraged to arrange
group volunteer activities that foster the One Carlyle collaborative spirit by working
together with other Carlyle colleagues across disciplines and teams. As a firm, we have
recently partnered with several organizations, including Junior Achievement (JA) and
Habitat for Humanity.
JA is the world’s largest organization dedicated to educating students about workforce readiness, entrepreneurship and financial literacy through experiential, hands-on
programs. In Washington, DC, 40 Carlyle employees participated in the “JA in a
Day” Program at Ferebee-Hope Elementary School on May 7, 2010. Co-Founder and
Managing Director Daniel A. D’Aniello led the inaugural event kicking off Carlyle’s volunteer partnership with JA. In Beijing and Shanghai, Carlyle employees are working with
wealthprogram.
sharingIn London, employees participated
workplace
JA on its Student Company
in their firstdiversity
volunteer events with JA since the launch of our partnership. Carlyle employees plan to
visit more local schools in 2011.
One Resource
One World
Habitat for Humanity partners with communities to find appropriate, long-term
housing solutions. Since it was formed in 1976, Habitat for Humanity has helped build
some 400,000 homes and has served more than two million people. In 2010, Carlyle
employees from our Washington, DC office partnered with Habitat for Humanity to
help refurbish two homes. Employees from our Seoul office have participated in four
Habitat for Humanity activities.
Also in 2010, staff members from our Washington, DC office volunteered with SOME
(So Others Might Eat) and served meals for the homeless and poor. Forty-five employees from the Tokyo office volunteered with Special Olympics Japan and JEN, an organization that supports people suffering as a result of disaster or conflict. These activities
are all part of the Tokyo office’s annual effort underway since 2005 to promote the
active involvement of all staff members in office-wide “Volunteer Days.” In May 2011,
employees from our office in Charlotte, North Carolina, donated school supplies to
Hidden Valley Elementary School through the city’s A Child’s Place program.
Governance
We believe we have a clear and effective framework that enables us to uphold the
highest ethical and business standards across the firm. Maintaining Carlyle’s good
name and the good names of our investors is paramount. From the earliest years of the
firm, we have invested heavily in our systems and controls. We perform most ongoing
activities in-house, including investor relations, corporate communications, financial
reporting and accounting oversight.
Ownership
Carlyle is a private partnership, owned by a group of senior Carlyle professionals and
two institutional investors. Mubadala Development Company, a strategic investment
and development company headquartered in Abu Dhabi, owns 9.35% of Carlyle and
CalPERS, the California Public Employees Retirement System, owns 5% of the firm.
Management
Carlyle is headquartered in Washington, DC and has offices in 19 countries. The firm
is managed by its three Co-Founders and Managing Directors, William E. Conway, Jr.,
Daniel A. D’Aniello and David M. Rubenstein. Joining the three Co-Founders on the
Management Committee are Glenn A. Youngkin, Managing Director and Operating
Committee Chairman, and Adena T. Friedman, Managing Director and Chief
Financial Officer. The Management Committee establishes Carlyle’s overall strategic
direction for the firm and sets firm policy. Supporting the Management Committee
in executing its directives and managing the day-to-day activities of the firm is a
group of senior Carlyle professionals we refer to as the Operating Committee. The
Operating Committee comprises: Glenn A. Youngkin, Chair; Michael W. Arpey; Jeffrey
W. Ferguson; Adena T. Friedman; David M. Marchick; Michael J. Petrick; Bruce E.
wealth
sharing
workplace diversity
Rosenblum; and Gregory L. Summe. All investments made by Carlyle-sponsored funds
are assessed and approved by fund-level investment committees comprising senior
investment professionals.
One Resource
One World
Corporate
Governance
Compliance Officer
Catherine Ziobro is Carlyle’s Chief Compliance Officer and is based in Washington,
DC. Ms. Ziobro is responsible for the oversight and management of Carlyle’s compliance program.
Conflicts of Interest
Carlyle has adopted a Code of Conduct that sets forth the standards of ethical
conduct for its employees. The firm also has a conflicts committee to help manage
conflicts of interests that may arise during the conduct of its business.
The Carlyle group
59
U.K. “Walker” Guidelines for Disclosure and Transparency
As a member of the British Venture Capital Association, Carlyle believes that it is fully
compliant with the Walker Guidelines for Disclosure and Transparency. Carlyle’s website,
www.carlyle.com, is regularly updated, and the information within it forms the basis upon
which compliance with the Guidelines is maintained. This Annual Report is produced in
addition to the website to deliver an overview of the firm and its activities.
The Carlyle Group’s U.K. Buyout Operation
CECP Advisors, L.L.P. is a U.K. Financial Services Authority (FSA)-regulated entity based
in London that provides investment advisory services to Carlyle’s European buyout and
growth capital investment funds, among other non-regulated services. The buyout funds
include Carlyle Europe Partners, L.P., Carlyle Europe Partners II, L.P. and Carlyle Europe
Partners III, L.P. The growth capital funds include Carlyle Europe Technology Partners,
L.P. and Carlyle Europe Technology Partners II, L.P. The advisory services provided by this
U.K. FSA-regulated entity include providing advice and recommendations to the funds
with respect to origination, investigation, structuring, financing, acquisition, monitoring and/or for the disposition of investments. It does not make investment decisions on
behalf of the investment funds or have the authority to enter into contracts or commitments on behalf of the investment funds. Andrew Burgess, Managing Director, heads
Carlyle’s U.K. buyout operation. Robert Easton, Managing Director, heads Carlyle’s U.K.
growth capital operation. Heather Mitchell, Managing Director, is Chief Compliance
Officer for CECP Advisors, L.L.P. The U.K. companies in Carlyle’s Europe funds include
Ensus, Integrated Dental Holdings and Talaris (see www.carlyle.com for details).
Germany “BVK” Guidelines for Disclosure and Transparency
As a member of the Bundesverband Deutscher Kapitalbeteiligungsgesellschaften (BVK),
the German private equity and venture capital trade association, Carlyle believes that
it is fully compliant with the BVK Guidelines for Disclosure and Transparency. Carlyle’s
website, www.carlyle.com, is regularly updated, and the information within it forms the
basis upon which compliance with the guidelines is maintained. This Annual Report is
produced in addition to the website to deliver an overview of the firm and its activities.
Carlyle portfolio companies in Germany, including ADA Cosmetics, H.C. Starck and
Personal & Informatik, will comply with the guidelines and the Annual Report will be
published on the website.
The Carlyle Group’s German Buyout Operation
Carlyle utilizes the services of Carlyle Beratungs GmbH, an independent advisory company based in Munich, Germany, that provides advisory services with respect to investment activity in Germany to Carlyle’s buyout funds, Carlyle Europe Partners, L.P., Carlyle
Europe Partners II, L.P. and Carlyle Europe Partners III, L.P. Dennis Schulze and Michael
C. Schuster are directors of this advisory entity. The advisory services include providing
advice and recommendations to the funds with respect to origination, investigation,
structuring, financing and monitoring. It does not make investment decisions on behalf
of the investment funds or have the authority to enter into contracts or commitments
on behalf of the investment funds. Gregor Böhm, Managing Director, is a specialist in
German private equity providing advice to Carlyle’s buyout funds.
our /
purpose
Invest wisely. Create value.
our /
mission
Generate superior investment returns
Inspire the confidence and loyalty of our investors
Attract, develop and retain highly talented professionals
Demonstrate principled industry leadership
our /
values
Be responsible and respected members of the global community
Service / Act in the best interest of our investors
Integrity / Uphold the highest standards of integrity, professionalism and confidentiality
Quality / Deliver best-in-class investment activities and services to our investors
Stewardship / Treat our investors’ money as if it were our own, balancing risk and reward
© The Carlyle Group, 2010 Design: Financial Communications Inc. Bethesda, MD www.fcicreative.com Stock photography by Getty Images
Accountability / Take personal responsibility and deliver on commitments
Teamwork / Create community and work together as One Carlyle
Respect / Value each other, encourage professional development, respect personal contributions and reward effective performance
Citizenship / Be responsible citizens in the communities in which we work and live
Entrepreneurship / Differentiate the firm through creative thinking and action
Determination / Show a will to win in every aspect of our business
All content included in this Annual Report, such as graphics, logos, articles and other materials, is the property of The Carlyle Group or others noted herein and is protected by
copyright and other laws. All trademarks and logos displayed in this Annual Report are the property of their respective owners, who may or may not be affiliated with our
organization. Any person receiving this Annual Report is permitted to copy and print individual pages for non-commercial purposes. Recipients may also copy or print minimal
copies of this report for informational, non-commercial use. These copies must not alter the original report’s content, including all legal notices and legends. There can be no
assurances that Carlyle’s investment objectives will be achieved or that our investment programs will be successful. PAST PERFORMANCE IS NO GUARANTEE OF FUTURE
RESULTS. Investors should read this Annual Report in conjunction with fund quarterly reports, financial statements and other disclosures regarding the valuations and
performance of the specific investments listed herein. Certain of the information contained in this Annual Report represents or is based upon forward-looking statements or
information. Forward-looking statements are inherently uncertain, and changing factors, such as those affecting the markets generally, or those affecting particular industries
or issuers, may cause events or results to differ from those discussed. Therefore, undue reliance should not be placed on such statements or the conclusions drawn therefrom,
which in no event shall be construed as a guarantee of future performance, results or courses of action. The Carlyle Group expressly disclaims any obligation or undertaking to
update or revise any such forward-looking statements. References to portfolio companies are intended to illustrate the application of Carlyle’s investment process only and
should not be viewed as a recommendation of any particular security or portfolio company.
The Carlyle group
3
1001 Pennsylvania Avenue, NW
Suite 220 South
Washington, DC 20004-2505
www.carlyle.com
4 The Carlyle group

Culture of performance

Transcription

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